How to Start Your Own Ice Cream Business

Ice cream businesses are probably the most visited shops by kids and adults alike. Understandably so as ice cream is one of the most popular desserts in the world. It’s been around since the 1500s as a treat for royalty in Europe. But thankfully, now anyone can get a scoop of rocky road whenever they want!

In fact, the average American consumes 22 lbs of ice cream every year!

And if you’re like me, that number is probably a little on the low end. As a matter of fact, the ice cream industry produces more than 870 million gallons of ice cream every year — over a billion lbs if you count frozen treats like cakes, popsicles, and ice cream cookies (my favorite).

So much ice cream is consumed every year that the ice cream industry generated over $5 billion in 2014, and that number is climbing every year.

The fact remains that Americans love ice cream. Which makes opening an ice cream business a pretty sweet idea.

How to Start Your Own Ice Cream Business

However, an appreciation for ice cream isn’t enough to qualify you to start an ice cream shop. There’s a lot of business aspects you need to understand before you scoop out your own niche in the ice cream industry.

By the time you finish reading this post, you’ll have a clear idea of exactly what you need to do in order to make your love of soft serve into a freshly served reality.

Step 1: Learn How an Ice Cream Business Works

The best way to learn something is by doing, and that goes double for the ice cream business!

Honestly, you can read a book about ice cream shops and ice cream businesses, but until you work at one, you won’t fully understand what it means to welcome a customer or what the perfect consistency of ice cream should be when you serve it.

If you really want to understand the ice cream industry, you need to go work at an ice cream shop.

Get a feel for staffing, for ordering, for marketing, for inventory. The list goes on and on, and no one can teach you better than an industry veteran who’s been running her own shop for years.

While there are lots of ice cream franchises around, the majority of ice cream shops are mom and pop family owned shops which have a lifespan of decades, so it shouldn’t be hard to find a great shop to learn from.

You don’t need to go work for them for a long time. Of course, the more time you spend under a successful business owner, the more you learn on how to run your future shop the right way. So utilize the time you do spend with them wisely. Ask questions. Take on as many responsibilities as you can. Look for ways to make the business more efficient.

Really talk to customers!

Ask them why they shop at this store as opposed to others. What do they love about it? What would they improve?

Learn about the legal requirements of owning your own ice cream business. What permits do you need? What certifications does each employee have to have?

Everything you’re doing here is market research, so the more of it you do, the better. Ultimately, it will all boil down into understanding the ice cream business, and this will help you create a solid plan.

Step 2: Create a Plan

Why do ice cream businesses fail?

The truth is, ice cream businesses fail for the same reason as many other businesses – the lack of a plan.

Your plan is your road map. Invest sufficient time, effort, thought, and research into creating your business plan so that when you start an ice cream shop you don’t have to think about what to do at every turn.

What kind of business entity will your ice cream business be?

Sole proprietorship, partnership, or a corporation?

By mapping out every decision, cost, and expectation ahead of time. As a result, you’d be saving yourself time and money down the road by allowing yourself to budget accordingly and price compare options. For example, if you know exactly how much you need of specific ice cream flavors and toppings, then when it comes time to order, you won’t panic and order too much ice cream. Moreover, you’ll know exactly how much to order because you will have already planned it out against your sales projections.

Step 3: Discover Earning Potential

How much money do ice cream businesses make?

Well, ice cream store workers make about $8.00 to $12.00 per hour. Management salaries run between $25,000 to $38,000 a year. These are costs you’ll have to factor into your business plan when figuring out your earning potential.

But as the owner, your earning potential depends on how your store does.

Are you a franchise or an independent shop?

Are you a high-end, specialty ice creamery making healthy, organic ice cream in-house or do you order your flavors in bulk from a distributor?

If you’re an independent store, you can set your prices and your margins as high as you’d like – but if your product doesn’t meet expectations, you won’t be in business long. However, if your offering does well, you can charge as much as you like for ice cream. Take a look at Lick Honest Ice Cream in Austin, TX. This small chain makes all seasonal and artisanal ice cream

Take a look at Lick Honest Ice Cream in Austin, TX. This small chain makes their seasonal and artisanal ice cream in-house using organic ingredients, allowing them to charge significantly more than traditional ice cream parlors. On top of that, they have distribution in place allowing them to sell their products throughout the state, and even deliver anywhere in the country.

If you’re a franchise on the other hand, then your margins are already set and you can check with the franchise for expectations. Cold Stone Creamery stores, for example, average about $358,000 a year in sales. After operating costs and franchise fees are taken out of that, a store owner can still expect to make a comfortable yearly salary.

There’s an upward trend in disposable income as the economy continues to improve. That drives a higher demand for frozen treats. The ice cream industry in the U.S. brought in just over $5 billion in 2014, reports Statista, and that number is growing every year. They predict that global revenues will reach $74 billion annually by 2018.

For those who succeed, the ice cream business offers longevity not available in every industry. The IDFA states that most ice cream businesses are family-owned and have stayed in the business for over 50 years.

Step 4: Set a Budget

Will you have a mobile stand, truck, or a brick and mortar store? An ice cream stand will need $2,000 to $10,000 in startup funds. An ice cream truck will need only slightly more than that. And according to the National Ice Cream Retailers Association, a brick-and-mortar startup can run from $50,000 to over a million dollars for the store space alone. And of course, there are the costs for equipment and inventory, making starting an ice cream business fairly expensive.

But the good news is that there are lots of financing and small business loan options available to you!

Equipment costs also vary greatly depending on what type of store you are.

A truck or trailer will have significantly less space, meaning smaller offerings and smaller equipment needs than a brick and mortar. Building a drive thru would cost significantly more.

It just depends on what type of business you want.

In no particular order, some costs to consider include:

Permits

Certifications

Insurance

Rent

Labor

Remodeling

Equipment

Supplies

Serving/to-go containers

Plasticware

Napkins

Cash registers

Signage

Franchising fees (if applicable)

Marketing

Website design

Because ice cream is food, there are tighter regulations and oversight than other businesses, such as a retail clothing boutique.

As such, running an ice cream store can be more expensive. So you want to keep costs down where possible.

Consider these to help keep costs down:

Schedule appropriately

Be aware of refrigeration doors left open

Order flavors or ingredients wisely. Avoid stocking up on items and having to throw them out

Order slightly used equipment instead of brand new equipment

Shop around to find the best quality for the best prices

Step 5: Decide Which Products to Offer

This is where the fun comes in!

Deciding which products you want to carry determines what kind of store you want to be. Here’s the step where you figure out if you’re a high-end, artisanal shop, a frozen yogurt shop, a custard store, a creamery, a trailer, truck, or any other variation of ice cream business. Just dump out all your ideas and then pick out what most excites you.

A word of caution, though.

If you try being all things to all people, you may have the opportunity to draw in more people, but run the risk of equipping your store to do too much, making it less efficient and costing you revenue in lost time.

If you pick a specialty, such as hand-dipped adult milkshakes, you can offer a product a small group loves and build yourself a loyal following as a hand-dipped adult milkshake authority! And by doing so, you can charge significantly higher margins for your specialty product.

Step 6: Decide on a Location

If you’re an ice cream truck, then you can just cruise around wherever there are large populations of kids in peak season like summer time. In addition, parks, sporting events, and residential neighborhoods are all prime locations.

If you’re opening a store, you want to make sure you’re in an area with lots of foot traffic, high visibility, lots of lighting, and easy access to get into and out of the parking lot and store.

You want to find a location that fits into your budget.

The National Ice Cream Retailers Association suggests finding a reputable real estate broker who specializes in commercial sales or leasing. They know of many projects that are up and coming and can help you plan accordingly.

Take advantage of social media and digital marketing.

As far as digital marketing goes, make sure to pay attention to your website. Publish your menu online, along with daily and weekly schedules. Another great way is to create a Facebook page for your store. and make sure to respond promptly to inquiries and messages sent through it. By doing this, you’ll be clueing them into the type of customer service your shop has.

Also, take advantage of Yelp and offer check in and review bonuses, and utilize Facebook Ads and Google Adwords to be featured locally in searches.

You have to make sure you have great employees and there’s a way of doing that. First, figure out what traits you’re looking for. Next, decide how many employees you’d need and where to find them. Finally, figure out how you want your interview process to look like, how you’re going to train them, and how you’d schedule them.

Coming up with a staffing plan ahead of time will save you considerable time and effort down the road.

Step 10: Decide on a Style/Design

Deciding on a style for your ice cream store can be a challenge.

You want to represent your personality, but not scare away any clients who may not share your passion for neon everything. The best suggestion I can offer would be to talk to your ideal customers and see what they like!

You can also meet with equipment suppliers and ask their opinion. At the same time, you can look at other stores you love for inspiration. But make sure to focus on an efficient workflow for employees, as well as adequate flow pattern for customers.

If you’re struggling with a name, here are some ideas for inspiration:

Step 11: Create an Accounting Plan

Having an accounting plan is not a “nice to have” option. It’s a must have.

As a business, your taxes will always come under scrutiny. So it’s critical to have every dollar accounted for and everything in order.

More so, you’ll be able to project your sales more easily with proper tracking, in addition to knowing if you are on track to stick to your budget. You’ll also be able to tell if anything is missing from your store, making an accounting plan part of your store’s security measures.

This gives you such a huge boost in running your business because you’ll be surrounded by a support group who wants to see you succeed. You’ll meet other ice cream retailers and also sometimes suppliers of cones, toppings, nuts, flavorings, and equipment.

Comments

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